DCIT Vs Solitaire Realinfra Private Limited (ITAT Delhi)
Introduction: This article delves into the recent decisions of the Income Tax Appellate Tribunal (ITAT) Delhi, specifically addressing appeals for assessment years 2013-14, 2014-15, and 2015-16. The appeals relate to additions made by the Assessing Officer, contested by the taxpayers and subsequently ruled upon by the ITAT.
Assessment Year 2013-14 (ITA No.1333/Del/2021): The article details the ITAT’s analysis of the additions made by the Assessing Officer on account of unsecured loans and estimated disallowance of expenses. Notably, the ITAT observed that these additions lacked incriminating material found during the search, leading to their deletion. The appeals raised by both the Revenue and the assessee are explored.
Assessment Year 2014-15 (ITA No.1334/Del/2021): The ITAT’s scrutiny of additions under Section 68 of the Act for unsecured loans and deemed dividend is discussed. The ITAT, in alignment with legal precedents, emphasizes that the addition for deemed dividend can only be made in the hands of the shareholder. The article provides insights into the arguments presented and the ITAT’s decision to delete the said additions.
Assessment Year 2015-16 (ITA No.1335/Del/2021): The article explores the ITAT’s examination of additions related to advance payments made without TDS, unexplained unsecured loans, and employee benefits. Similar to the earlier years, the ITAT reiterates that these additions lack a basis in incriminating material found during the search, leading to their deletion. The reasoning behind the ITAT’s decision is outlined.
Conclusion: The conclusion summarizes the key outcomes of the ITAT Delhi’s rulings, highlighting the consistent theme of deletions based on the absence of incriminating material found during the search. Additionally, the article emphasizes the critical precedent that deemed dividend additions can only be made in the hands of shareholders. Taxpayers and practitioners gain valuable insights into the decision-making process of the ITAT Delhi, reinforcing the importance of incriminating material in assessments.
FULL TEXT OF THE ORDER OF ITAT DELHI
These appeals by the Revenue are directed against the respective orders of the ld. CIT (Appeals)-4, Kanpur, all dated 14.07.2021 pertaining to the assessment years 2013-14, 2014-15 and 2015-16 respectively.
ITA No.1333/Del/2021
2. First, we take up the appeal of the Revenue for Assessment Year 2013-14 in ITA No.1333/Del/2021. In this case, the assessment order was framed u/s 143(3) r.w.s. 153A of the Act.
This was pursuant to a search and seizure operation u/s 132 of the Act conducted on 03.11.2016 at the premises of the assessee. The Assessing Officer made addition on account of unsecured loan amounting to Rs.20 lakh on the ground that the assessee was not in position to prove the creditworthiness and genuineness of loan.
3. Similar addition was made on estimate basis for lack of books of account along with bill and vouchers with relationship to the various expenses. The Assessing Officer disallowed 10% of the expenses amounting to Rs.48,53,306/- and added the same to the total income of the assessee.
4. Upon assessee’s appeal, the Ld. CIT(A) considered the merits of the addition and deleted the same.
5. Against this order, the Revenue is in appeal before us challenging the aforesaid additions.
6. The assessee has filed a petition under Rule 27 of the ITAT Rules by raising the ground that these additions are not sustainable as there is no incrimination material found, as a result of search and the assessment attained finality.
7. We have heard both the parties and perused the records. A perusal of the assessment order clearly reveals that these additions are not based upon incriminating material found during the search. This aspect was fairly conceded by the Ld. CIT-DR. Accordingly, these addition made dehors incriminating material found during the search which are liable to be deleted on the touchstone of the decision of the Hon’ble Supreme Court in the case of PCIT vs Abhisar Buildwell Pvt. Ltd. (2023) SCC Online SC 481; they are directed to be deleted as such.
8. Since, we have held that these additions are liable to be deleted on account of lack of incriminating material, the ground raised by the Revenue stands dismissed and ground raised by the assessee under Rule 27 of the ITAT Rules, stands allowed.
